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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About FHA Loan Limits
If you are looking to buy a property with a mortgage, you have many loan programs that you can choose from like conventional mortgage, USDA loan, VA loan, and FHA loans.
Most loan programs have a set lending limit every year. Just like a conventional loan, an FHA loan also has lending limits. In this post, we will take a look at what FHA loan limits are in 2022.
More About FHA Loan Limits In 2022
FHA loan limits represent the maximum amount that the Federal Housing Administration (FHA) can back for different categories of home types in various counties in each state like single-unit and two-unit homes.
FHA Loan limits may differ based on local home values and type of property and are calculated and updated annually.
These limits are based on the usual loan limits set by Fannie Mae and Freddie Mac for conventional mortgages.
The borrower can get an FHA mortgage through the FHA-certified lender or a bank.
The FHA loans are backed by the Federal Housing Association. Compared to conventional loans, which are not backed by any federal agency, FHA usually has low credit and down payment requirements.
Hence, FHA loans are one of the most popular types of loans that are utilized by many borrowers across the country.
In 2022 the FHA loan limits have increased compared to last year. The new limit for FHA loans for most single-family homes is $420,680.
Last year the FHA max loan amount for single-family homes was $356,360, which is an increase of $65,000 from 2021.
The reason for this increase is due to home price inflation and this is the FHA’s way to keep up with the pace. This allows borrowers to find homes in the inflated housing market.
What Are The FHA Loan Limits In 2022?
| FHA Loan Limits | Most Areas | High-Cost Areas |
|---|---|---|
|
Single unit |
$ 420,680.00 |
$ 970,800.00 |
|
Two units |
$ 538,650.00 |
$ 1,243,050.00 |
|
Three units |
$ 651,050.00 |
$ 1,502,475.00 |
|
Four units |
$ 809,150.00 |
$ 1,867,275.00 |
For a single-family home loan this year, FHA loan limits range from a floor of $420,680 to a maximum of $970,800.
Areas like Alaska, Hawaii, U.S. Virgin Islands have special considerations where the minimum FHA loan amount is $1,456,200 and the FHA max loan amount is $1,864,575.
For example, if you are planning to buy a single-unit single-family home in Houston TX, your max loan amount would be $420,680.
However, if you are planning to buy a single-unit home in Hawaii, your maximum loan amount would be $1,456,200.
As the loan limits for FHA loans are influenced by conforming loan limits, there was an increase in the conforming loan limits for this year. Due to this, the lower basic limit for FHA was increased by 65% compared to conventional loans.
To be approved for an FHA loan, your mortgage must be within the maximum loan amount backed by FHA.
These loan amounts, known as “FHA loan limits,” may differ based on the county that your property is located.
This year, the Department of Housing and Urban Development (HUD) has increased the FHA loan limits to 3,188 counties and there are 45 counties where there are no changes in the loan limit.
Conclusion
The new loan limit increase has greatly boosted the FHA loan market as many first-time homebuyers could benefit from the same.
When the real estate prices increase, the conforming loan limits will increase. And if the conforming loan limits increase so will the FHA loan limits.
FHA mortgage is an excellent program for borrowers as it has low-interest rates, low down payments, and flexible credit requirements.
With the loan limit being increased, you can now think of buying properties that earlier were beyond the FHA loan limits.
